Global macro overview for 22/09/2017

The USD was hit by the overnight turmoil that prompted investors to take profits off the table after the USD rally in the wake of the hawkish FOMC statements. Still, the fundamental background that is now being built around the US Dollar may be getting more attractive (hawkish Fed, macroeconomic data improvement, Trump administration pushing the tax reform), which could sustain the USD strength at the end of the year. Today in the calendar there is a few of the Fed members speeches: Williams (10:00 am GMT), George (01:30 pm GMT) and the Chaplain (05:30 am GMT). The latter seems to be the most important, as recently his comments pointed to a diminishing support for the December rally. After the Wednesday decision of the FOMC, and especially after the dotted graph, global investors can assume that Kaplan has maintained his voice for a hike, so his statement is less likely to be dovish again.

Let’s now take a look at the US Dollar Index technical picture on the H4 time frame. Contrary to popular skepticism, the Philly Fed index was released at 23.8 pts, beating the market with a relatively low median of 17.1 pts. The above result was not only made due to a significant boost to expectations, but also due to a higher cost sub-indexes and a solid inflow of new orders. Expectations of market participants clearly surprised weekly estimates from the US labor market, according to which the application for unemployment benefits submitted only 259k Americans. The relatively high median of forecasts (302k) condemned the implications of Hurricane Irma on the east coast of the United States. Nevertheless, even the good macro data did not help the USD as the index was clearly rejected after a false breakout above the golden trend line around the level of 92.67. The next technical support is seen at the level of 91.62.